Retail Day Trading Journal

Discussion in 'Journals' started by retaildaytrader, Aug 26, 2009.

  1. Im just a student in the art of trading. I just started daytrading from my home and my initial capital is $50,000. I dont have any job and all day long I have been at the screen watching the market right along with CNBC.

    I am starting this journal so as to collect feedback and ideas. All of my experience and education comes right from books, but not actual trading.

    Right now Im watching the market and already made a mistake by deviating from my thesis that there would be short covering into the close because of the initial claims and gdp reports coming out tommorrow. Thats a 500-700 mistake right there.

    The main instrument I am going to utilize is the TNA/TZA etfs. I am familiar with the ES, but its simply too leveraged for my tastes and that is all together a different game. Options is not for me because I dont understand them and know I never will. Trading stocks is a difficult game too. I really dont understand how many of these companies trade or the economics behind it. For all I know, there are a bunch of guys at a few trading desks around NYC holding them up and I will get trapped in the middle of all this.

    My background is in construction and I have no interest in working for a prop firm or any kind of fund or institution. I enjoy the privacy and peace of my home and answering to myself. Prop firms please do not send me any pms, not interested.

    So I invite feedback and suggestions as I am just a student of the market. Im going to post my thoughts on the market each day along with a few charts from the software I have.

    Here is a blotter of my first trades for today.

  2. I might make some more trades today, but I know if I do then I'll probably lose some cash. I think my time is better spent doing research for the next trading day versus getting back on the platform.

    Here are some things that Im noticing:

    TLT- Breaking out with a large weekly candle. This thing started ticking up before the last corrections in the market started and then ticked down before the bottoms.

    VIX- Still high versus the past. For the last month, it appears to be trading in a small range. It could be basing. Volume on the VXX started going up recently as if there is a buyer out there expecting it to break out. No opinion at this time. I'll wait and let the market tell me what happens next for the vix.

    RUT- Key level 588 was sold the other day. The floor is holding for now, but the formation Im seeing is H&S taking place.

    SPX vs RUT through H&S formation- RUT is lagging in performance through the pattern.

    OIL- 20 day moving average is at $70.84 on the spot. Yesterday, it held. Tropical Storm Danny is forming and will hit the coast this weekend. Unknown if it will form into hurricane.

    News for Thursday- Initial claims, GDP out at 8:30. Reporting before bell: APWR, AEO, CSUN, CONN, FRED, ENER, TOI, VIP. After: ARUN, BEBE, DELL, MRVL, MCRS, OVTI, SLH. 7-year auction at 1pm. James Bullard speaks at 5pm.

    Chart Patterns/Price- Previous week close at 1026.13 on the $SPX providing soft support. Price went below yesterdays close producing a red indecision doji. Today's low was 1023.58, 5 day simple moving average is 1022.85. RUTs low was 580.38, 5 day simple moving average is 579.23. Yesterday price stretched over the top Bollinger for both SPX and RUT.

    Bob Pisani- He says there will be a trend change soon.

    Conclusion and trade plan- There is a gap on the SPY and IWM which price is being attracted to. The chart pattern's H&S has a well defined neckline. Price is respecting the 5 day average and getting support from quite a few areas such as last week's close.

    I think this is a bear trap and the H&S pattern will be invalidated by tommorrow once the news is out. Im thinking that price is going to run to 1200-1300 before it finds a pivot.

    My plan is trade around the neckline. If the neck breaks, then Im going to get long the TZA and look for pivots intraday like I did today.

    I was thinking the VXX would make a great hedge as the VIX spikes up a lot during these corrections.

    Account balance at end of today is $52000 approximately.

  3. I just saw something that is interesting. The Nasdaq composite's exact low in 2006 was 2012.78 and the lows on the comp these last few days were right at 2012.

    Im suspecting both the XLF and IYR are going to break out. Price is moving into this pennant like pattern. It could exit out either direction.

    This makes me further believe that the pattern is a bear trap. There is too much support underneath...

    We will see in the morning what happens with the reports. My vote would be for another move up from here, but lets see what the market tells me in the morning.
  4. I think I figured it out. Thats not a H&S, but looks more like a diamond pattern. It should exit out of the pattern with just as much volume as when it came. 1 hour of trading should be about 5 million shares on the IWM in 30 minutes for a convincing exit. Then there will be a 50-50 chance that it will throw itself back into the pattern.

    Once it busts out in either direction, your going to have a minute to pull the trigger. I looked at how it came into the formation and anyone who wanted to make dollars had 1-3 minutes to pull. On this one, you cant hesitate. Its going to go up or down, but it will take a fast hand to capture the trade.

    I noticed the volume was twice as high in TZA then it was in TNA today. The BGZ volume was about 30-40% higher then in the BGU.

    The sentiment in the 3x inverse traders is for a breakdown. The diamond can be a continuation pattern though and I think they see H&S like I did at first.
  5. This is what I was looking at today. Final entry for the day. See you tommorrow.

  6. lpchad


    Great thread. Probably one of the few with at least some capital to trade with on this site. Looking forward to your journal.
  7. Oops. One more thing before I take off and switch off the computer.

    This is the VXX. I looked through the $VIX for as far back as I could go day by day. In 2003, the $VIX just fell out, but now it has been sitting there for the last month or so.

    The VXX has not traded very long and you cant see the potential, but its there. This could double in a period 4-9 weeks while all of the other stocks are falling out. It cant stay up there forever, so then it becomes a good long term short.

    I dont have any experience with the VXX or the VIX futures so Im wondering if anyone has any thoughts on playing the VXX.

    I feel good because I am in cash and can turn everything off not having to worry until tommorrow. Thats the best thing about not holding overnight...simple peace of mind...

  8. mabenn


    You will probably do much better than me, I'm still working out my whole plan and practicing with live experience. I just started as well. I will be checking in for sure.

    Good trading
  9. [​IMG]

    Im taking some positions into tommorrow. Since my last journal entry, I made a series of mistakes that at one point brought the balance down to $45000 such as "catching the falling knife".

    I simply made a bunch of bad trades and learned a few lessons such as:

    1) Do not initiate new positions until after 10am.
    2) Do not buy into a downtrend.
    3) Make sure you have the best charts in front of you.

    Im a little older and so I have more control over my emotions and can manuever myself out of bad situations quickly. I wonder what its like to be in a room full of younger traders who are not mature enough to control themselves.
  10. mabenn


    I traded in a room full of younger traders... So much excitement when things were going their way, and so much anger when they weren't. I saw a guy snap his keyboard in half after losing his whole winning month in the last half hour of a day.
    #10     Sep 2, 2009